By themselves, they don’t. Many sites have html errors and rank just fine on search engines. Browsers are smart enough to display the pages properly. The rationale for search engines not penalizing sites for html errors is that users don’t care. They want a site that works, has the content they are after…The user does not care if there is an unclosed table cell here or there, or something wrong with the html that means the html is not perfect.

Matt Cutts from Google has made it clear, perfect html or html that is compliant with this or that standard is neither rewarded nor penalized.

But html errors, can still hurt you.

The problem is browsers(eg, internet explorer, safari, chrome etc) are clever, and can display a page the way it is supposed to, even if you make a mistake with the html. Search engines will ignore most mistakes, but there are some mistakes that they cannot and will not ignore, and if your site has them, your site will not receive a “penalty” from a search engine, but you will see search engine rankings that are lower than you would otherwise receive for your site.

What is a Search Engine Penalty?

It’s important that I clarify this first. A Search engine penalty is incurred when you do something that a search engine deems is done to trick it and they thus may penalize your site by artificially lowering your rankings. Broken html of course is never viewed as being done intentionally to trick a search engine…so therefore it would never incur a “penalty” from a search engine.

That said, the effect for some html errors will look and feel like a penalty.